Some unpaid interns from Black Swan sued the production company for actual wages, and guess what? They won. A couple days ago the Southern District of New York issued its opinion inÂ Glatt v. Fox Searchlight Pictures (opinion here).
The Court broke it down into two issues:
1. Were the interns employees under the FLSA?
2. If so, did they fall under the narrow “trainee” exception?
On the first issue, the Court applied Second Circuit utilizing the “formal control” and “functional control” tests. This determination will vary from jurisdiction to jurisdiction. But, as the Court noted, “in the end, it is all about control.” And that’s pretty consistent no matter what court you’re in.
The second issue is the particularly interesting part of this case. In determining whether the interns fell under the trainee exception the Court relied heavily on the six factors identified in a DOL fact sheet from 2010 (I blogged about this back in 2010):
1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
The Court ruled that the unpaid interns were employees who did not fall under the trainee exception. Now, a Time magazine article is declaring this decisionÂ The Beginning of the End of Unpaid Internships. I don’t know about that . . . but I do know that this case is generating a ton of buzz, and it’s difficult for unpaid internships to be FLSA-compliant.
This article was originally printed onÂ Lawffice Space on June 13, 2013. Â Reprinted with permission.
About the Author:Â Philip K. Miles III, Esq.Â isÂ the creator of Lawffice Space. Â He is an attorney withÂ McQuaide Blasko, a full-service law firm headquartered in State College, Pennsylvania. Â He belongs to the Labor and Employment, and Civil Litigation Practice groups. Â Lawffice Space is an independent law blog focusing on labor and employment law.